Proxy advisory firm Institutional Investor Advisory Services India (IiAS) has urged the independent directors of Raymond Limited to probe into the allegations against chairman and managing director Gautam Singhania made by his estranged wife Nawaz Modi. IiAS also wants them to appoint an interim CEO till the investigations are completed and warned that their silence could be misconstrued.
In an open letter on Tuesday, the advisory firm has also asked them to engage the services of an independent legal counsel, apart from dispassionately separating ownership from management.
Quoting media reports, IiAS said that Nawaz Modi Singhania, a board member, had alleged that Singhania physically assaulted her and her daughter in September 2023. In addition, Nawaz Modi had alleged that business funds were being misused for Singhania’s personal gain.
“Despite such serious and heinous accusations by one board member against another, you have been silent. Investors are worried, which is reflected in the significant erosion in stock prices over the past few days. Your silence can be misconstrued — surely you don’t want stakeholders thinking that these accusations are to be tolerated,” it said.
“At the very least, as independent directors, you need to communicate with investors and other stakeholders – assuage their concerns and articulate a course of action that you have taken following these public allegations. Your actions must protect the company from what proposes to be a long-drawn acrimonious battle between Nawaz Modi and Gautam Singhania,” it added.
The letter was addressed to Mukeeta Jhaveri, Ashish Kapadia, Dinesh Lal, K Narsimha Murthy and Shiv Surinder Kumar, all independent directors of Raymond. Nawaz Modi is a non-executive director of the firm.
Further, it wanted both Nawaz Modi and Singhania to take time off from their responsibilities as board members till the completion of the probe.
IiAS urged independent directors to probe whether either director (Modi and Singhania) violated the code of conduct and ethics policy, are there criminal liabilities on the company or any of its directors, are merit in the allegations of CEO excesses and the impending divorce a distraction for the CMD.
To protect themselves, the independent directors should delineate from the allegations and retain an independent legal counsel, it added.